'It's up to us' on U.S. shale boom, energy leader says

John Bolton, former U.N. ambassador, left, and Chad Deaton, CEO of Baker Hughes, told participants at Deloitte's event in Houston that shale is changing the industry.

Photo By Melissa Phillip/Staff

John Bolton, former U.N. ambassador, left, and Chad Deaton, CEO of Baker Hughes, told participants at Deloitte's event in Houston that shale is changing the industry.

Regulation and lack of ingenuity are perhaps the only things that could stand in the way of the U.S. shale boom that has emboldened energy hawks in recent years and prompted talk about oil and gas self-sufficiency at home, industry officials were told Tuesday.

Among the topics at Deloitte's oil and gas conference at the George R. Brown Convention Center downtown were how shale is changing the energy industry, development of North America's oil and gas resources, expanding Canadian markets and Arctic exploration.

The executive chairman of oil field services company Baker Hughes, Chad Deaton, told hundreds of conference attendees in his keynote address that the U.S. needs to keep its standing among the leaders amid growing international competition to exploit vast shale plays around the world.

He cited China, the Middle East and parts of Europe as having shale gas opportunities.

"It's up to us," Deaton said. "We have to let the government and the public know we are good citizens, we are protectors of the environment and we do create jobs."

Improving technology

He said the industry still faces great challenges in meeting growing world energy needs.

So, in addition to seeking reasonable regulation, Deaton also called for the industry to continue to improve technology for producing natural gas at lower cost, so it can increase profit while offering low-priced gas to consumers.

"We have to figure out technically how we can do this differently," he said. "Technology is the answer to this."

Former U.N. Ambassador John Bolton said the United States' rising energy independence should not encourage the nation to adopt isolationist policies or weaken its military position in the world.

Bolton, ambassador under President George W. Bush, said countries including Russia and China are using their oil and natural gas resources to strengthen their militaries and influence global politics.

If the U.S. does the opposite, it will leave a vacuum of global leadership and destabilize key regions of the world, Bolton said.

"If we pull back from the world under the belief that it will not have any real impact, we are just kidding ourselves," he said.

Bolton said Russian President Vladimir Putin has used the nation's wealth of oil and natural gas and its control of pipelines to reassert geopolitical influence, notably in Eastern Europe.

"Putin and his cohorts have been able to take advantage of the global price of oil over the past several of years to upgrade, to modernize and rationalize Russia's conventional military forces," Bolton said. "Russia's newfound assertiveness is based in substantial part on oil and natural gas and on Putin's determination to exploit it."

Getting self-sufficient

On Monday, the International Energy Agency reported that the U.S. is projected to surpass Saudi Arabia as the world's top oil producer by 2020 while cutting its own energy use faster than any other nation.

The nation now relies on imports for 20 percent of its energy needs, but the agency's report said increased production and higher vehicle-fuel standards will help make the country "all but self-sufficient" by 2035.

At Tuesday's conference, however, Deloitte released a survey of oil and gas professionals that offers a less rosy outlook for U.S. oil production in the future.

Fearing regulation

It concluded that America can count on plentiful domestic natural gas but will continue to rely on foreign oil.

Fifty-four percent of respondents said the United States never will be completely oil self-sufficient, while only 26 percent said oil self-sufficiency is achievable in the next 10 years.

The industry considers regulation a major potential roadblock to energy self-sufficiency.

"I have to believe that regulators will set the bar high, but we have to do it right," Deloitte senior adviser Peter Robertson told reporters during a briefing.